UK GDP decline paints a grim outlook for the UK

UK GDP contracted further to a negative 0.3% compared to 0.2% in September

By Nadia Elbilassy | @Nadia Elbilassy | 13 December 2023

Market close
  • GBP/USD fell by 0.4% to 1.2523 due to a contraction in the UK's October GDP, raising concerns about the compounding challenges for the Bank of England.

  • The U.S. dollar saw a modest 0.2% increase to 103.98 ahead of the Federal Reserve meeting.

  • Gold prices remained below $2000, with spot gold at $1,983 per ounce, and gold futures for February showed little change at $1,993.70 per ounce.

On the Market Watch!

GBP/USD falls

The GBP/USD fell 0.4%, reaching 1.2523, following the release of data indicating a contraction in the UK's economy during October. The UK’S GDP registered a negative 0.3% decrease compared to 0.2% in September.

Another unfavorable indicator for the UK sinking into a recession and the challenges confronting the Bank of England compounded by elevated interest rates and inflation and a declining GDP.

The U.S. dollar saw a slight increase, ahead of the upcoming Federal Reserve meeting, recording a 0.2% gain, reaching 103.98. After sliding overnight following the release of cooling but somewhat sticky inflation.

USD/JPY steadies

The USD/JPY steadies near 145.61, as the Japanese yen retreated, ahead of the upcoming Bank of Japan meeting next week. The central bank is widely anticipated to indicate no change yet to their negative interest rates.

Gold prices

Gold prices remained below the $2000 level as investors hold their breath ahead of the FOMC meeting later tonight, as this time, interest rate projections will come under the spotlight.

The yellow metal’s trajectory has been facing intense fluctuations especially after reaching record highs above $2,100 per ounce before experiencing significant pullbacks.

Spot gold stabilized at $1,983 per ounce, while gold futures expiring in February showed no significant change, holding at $1,993.70 per ounce.